Wednesday, November 1, 2017

The latest attempt by Chevron CEO John Watson to foist his company's RICO fraud from the United States onto Canadian courts just got slapped down by a three-judge panel from the Ontario Court of Appeal. This suggests the oil giant faces major hurdles in Canada in its campaign to evade enforcement of a $12 billion liability owed to Ecuadorian indigenous peoples and farmer communities.

The latest Canada decision, which can be read in full here, can only be described as a powerful rebuke to Watson, Chevron General Counsel R. Hewitt Pate, and the company's army of Canadian lawyers who are being paid big bucks to obstruct and delay the case. Consider these key takeaways from the decision:

Chevron's SLAPP-style harassment attempt to impose a $1 million costs order on the impoverished indigenous groups always was a classic corporate maneuver to evade liability by trying to end the litigation without a resolution on the merits. The Appeals Court vacated the order in its entirety. Chevron General Counsel Pate sent at least 20 high-billing lawyers to court, implicitly disclosing that the company was spending more in legal fees to obtain the costs order than it would have received had it been granted. Worse, almost all of the Chevron lawyers were bland white men in suits whose job apparently is to block aboriginal peoples from collecting money they need to clean up an environmental disaster caused by Chevron. The fundamental disparity in resources – Chevron makes $225 billion annually while the indigenous groups live in poverty due largely to Chevron's pollution – could not have been more stark.

Chevron's attempt to leverage U.S. Judge Kaplan's completely flawed civil RICO (or "racketeering") decision against the indigenous groups appears to have backfired yet again. It is becoming more apparent in Canada that the Kaplan decision is a debacle for Chevron and actually favors the aboriginal groups on a variety of levels. It is now seen as a product of Chevron's fraud in presenting false testimony from a disgraced witness paid $2 million who later admitted lying in court. No Canadian court wants to be told by a U.S. oil company that it must defer to a U.S. judge – especially one who conducted a hocus-pocus proceeding in favor of Chevron. Violating his duty of neutrality, Kaplan obviously bent over backwards to help the oil major. He also failed to disclose his own ethically dubious investments in the company when presiding over the RICO trial.

The three Canadian judges implicitly rebuked both Judge Kaplan and the Canadian motions judge who relied heavily on Kaplan's erroneous decision to impose the costs order, while ignoring the Ecuadorian trial court decision at the heart of the case. The Ecuador decision, we might add, was issued by the very court where Chevron for years insisted the trial be held. The panel wrote: "There can be no doubt that the environmental devastation to the appellants' lands has severely hampered their ability to earn a livelihood. If we accept the findings that underlie the Ecuadorian judgment – findings that have not yet been undermined in our courts – Texaco Inc. contributed to the appellants' misfortune." You can say that again – cancer rates in the area are skyrocketing, and untold numbers of people already have perished due to Chevron's refusal to abide by the Ecuadorian court order.

The Canadian court also found that Chevron obviously doesn't need its costs paid. How obvious is this? The company already has used at least 60 law firms and 2,000 lawyers since the inception of the case. It grosses $225 billion per year. And yet, nary a word was written in all prior decisions on the issue. The Canadian panel confronted it directly: "Chevron Corp. and Chevron Canada have annual gross revenues in the billions of dollars. It is difficult to believe that either of these two corporations... require protection for cost awards that amount or could amount to a miniscule fraction of their annual revenues."

The decision was also an implicit rebuke to the duplicitous Larry Lowenstein, Chevron's lead lawyer in Canada and a partner in the prestigious Osler law firm. Lowenstein made a cameo before the appeals panel and tried to peddle the Kaplan decision as being the final word on the case. As said, that decision is a product of Chevron's fraud. Lowenstein used Kaplan to try to dupe Canada's judges, but they would have none of it. Osler cannot be so desperate for business that it would stoop to this level of "service" for a company known in environmental circles as a major polluter.

While the latest decision removes a major roadblock for the Ecuadorian indigenous groups, there is still substantial work to be done even after five years of litigation in Canada's enforcement courts. Chevron no doubt has many tricks up its sleeve, including trying to hide its Canadian assets in wholly-owned subsidiaries. Courts in Canada need keep their door open to human rights victims and resolve the claims in this matter without further indulging the company's dirty tricks campaign.

Five years already is way too long for any enforcement action, much less one where thousands of indigenous lives hang in the balance and where a final judgment has been rendered in the preferred jurisdiction of the debtor.

Monday, October 16, 2017

To help Chevron block enforcement of the Ecuador environment judgment in Canada, company lawyer and Osler partner Larry Lowenstein flat-out lied last week to a panel of three judges on the Ontario Court of Appeal in Toronto. It is the vulnerable indigenous communities in Ecuador who pay the price for Lowenstein's bad form in service of one of the world's worst corporate polluters.

Lowenstein's partners at Osler naturally claim they run one of the leading business law firms in Canada. If misleading courts and shareholders on behalf of clients is how Osler gets its business, as Lowenstein seems to think, then those partners might need to rethink their marketing model.

Lowenstein made an interesting cameo for Chevron last Wednesday before the appeals panel in Toronto that heard argument over a $1 million costs order the oil major is trying to impose on the impoverished indigenous groups it poisoned. Those indigenous groups in 2013 won a $9.5 billion environmental judgment against Chevron, as determined by three layers of courts in Ecuador in the venue where the company insisted the trial be held and where it had accepted jurisdiction.

Since then, Chevron has hired 60 law firms and used roughly 2,000 lawyers to evade paying the judgment. It sued an American human rights lawyer for the Ecuadorians for $60 billion before dropping all money damages claims on the eve of trial. It is now suing the same lawyer (Steven Donziger) for $33 million in fees, trying to bankrupt him. (For background, see here.)

This is how Chevron rolls. And without lawyers willing to do its bidding, Chevron could never get away with such blatant misconduct.

Chevron's attempt to impose a costs order in Canada is a vital part of the company's global intimidation model. It is a brazen attempt to close the courthouse doors to the very people who are trying to collect a judgment Chevron owes that will be used to clean up the horrific contamination the company left on their ancestral lands. This is in consistent with a threat Chevron made in 2009 promising the indigenous groups "a lifetime of litigation" if they continued to pursue their claims.

"We will fight this case until hell freezes over, and then we will fight it out on the ice," said Charles James, Chevron's former General Counsel.

As the latest front man for Chevron's impunity campaign in Canada, Lowenstein claimed to the appeals panel that the Ecuador judgment was based on an "egregious fraud" because that's what a pro-business U.S. judge, Lewis A. Kaplan, determined after a lopsided "racketeering" trial held in 2013 where the court refused to consider any evidence of Chevron's environmental contamination. Kaplan also held undisclosed investments in Chevron during the trial, which for a myriad of reasons was called a "Dickensian farce" by noted U.S. trial lawyer John Keker.

In making his argument, Lowenstein lied about the overwhelming evidence against Chevron in the Ecuador proceeding, ignored the false testimony that Kaplan credited in the RICO matter, and covered up evidence of Chevron's fraud in both Ecuador and the United States to try to distract attention from the company's liability.

Consider what Lowenstein failed to mention about Chevron's role in creating an environmental and humanitarian catastrophe in Ecuador so massive it is called the "Amazon Chernobyl" by locals:

Chevron was found by three layers of courts in Ecuador to have dumped billions of gallons of oil waste into the rainforest over a two-decade period, decimating indigenous groups and causing numerous cancer deaths. The court decisions were based on 105 technical evidentiary reports. Here is a summary of the overwhelming evidence; a legal brief that explains the history of the company's dumping and cover-up; and a summary of the high cancer rates.

Initially sued by indigenous villagers in New York in 1993, Chevron praised Ecuador's justice system thinking it could engineer a political dismissal of the case by shifting it to the South American nation. With the scientific evidence mounting in its preferred forum of Ecuador, Chevron sold its assets to evade paying the judgment.

Ultimately, Chevron was ordered to pay $9.5 billion in damages and costs. This amount is a pittance compared to the roughly $50 billion BP has paid for its much smaller Gulf of Mexico spill in 2010.

Chevron retaliated by suing the indigenous groups and their lawyers before Kaplan, who invited the company to file the action. Chevron then made a mockery of justice with Kaplan's blessing, dropping all damages claims on the eve of trial to avoid a jury. Chevron also bribed a witness with $2 million to claim that the judgment in Ecuador was "ghostwritten" – testimony that since has been proven false but was nontheless credited by Kaplan.

The bribed Chevron witness, Alberto Guerra, later admitted that he repeatedly lied under oath before Kaplan. Separately, a forensic examination by the American expert J. Christopher Racich demonstrated that the Ecuador trial judge wrote the decision on his office computer, contradicting Guerra's false claim that it had been given to the trial judge on a flash drive.

In total, 18 judges appellate judges in Ecuador and Canada have ruled in favor of the villagers and rejected Chevron's "fraud" claims. Yet Lowenstein refers only to a rogue decision from one U.S. judge who relied on false evidence for his findings in favor of the company. (The Second Circuit Court of Appeals refused to review those erroneous findings, as did the U.S. Supreme Court.) Lowenstein also ignores that 17 prominent human rights groups and 19 international law scholars have sided with the indigenous groups against Chevron.

Because of its corrupt acts and disdain for the rule of law, Chevron now finds itself in serious trouble. It faces possible criminal and civil jeopardy for its cover-up in addition to its $12 billion environmental liability (rising $300 million per year because of interest) to the people of Ecuador. Company management also faces a shareholder revolt over its unethical behavior.

Another big Lowenstein whopper before the Toronto appeals court came when he claimed that Donziger, one of the American lawyers for the villagers, "controls" monies that will be deposited in trust for a clean-up.The trust is actually controlled by the affected communities, not their lawyers.

Lowenstein's delightful little speech reminded us of the bit part played by a professor from Notre Dame who also allowed himself to be used by Chevron for money. That professor, Douglas Cassell, was slapped down by Notre Dame's administration for hiding the fact he was shilling for the oil giant while trying to act like a disinterested scholar. For background, see here.

The personal reputation of Lowenstein, and by extension that of the Osler partnership, is in play. The American law firm Gibson Dunn suffered a huge setback for its own unethical work of behalf of Chevron. Osler obviously is Chevron's answer to Gibson Dunn in Canada – a law firm with a willingness to cross the ethical line in "service" of a client engaging in criminal misconduct.

Lowenstein and his partners might make amends by disclosing how much the firm charges to engage in a representation that includes the distortion of facts and the misleading of courts on behalf of a human rights abuser.

Thursday, October 12, 2017

The latest chapter in the decades-long struggle seeking justice for Chevron's crimes in Ecuador is taking place in Canada right now. Unfortunately, as the years grind by the issues being debated get further and further away from the substantive problems of environmental contamination and human suffering, and the process becomes stuck in a legal quicksand of Chevron's design. The hearings before the Ontario Court of Appeals this week were a perfect example of that.

Amazon Watch continues to bear witness to this ongoing perversion of justice, both because we ourselves are a target of Chevron's attacks, and also because the cynical strategy the oil giant employs is a real and present danger to corporate accountability work everywhere. For that reason we attended the hearings in Toronto this week along with artist and activist Roger Waters, founding member of Pink Floyd. Waters spoke to the media to express his outrage at Chevron's endless legal maneuvers to escape justice for its crimes.

"It's a fundamental question of whether corporations like Chevron ... should be allowed to use their financial muscle to destroy people with an absolutely vital claim to reparations for damages that were caused to them over many years," Waters said before the hearing. "The way Chevron has behaved here is against everything that any of us might believe society ought to be like."

This week was supposed to see the beginning of the appeal of the previous decision in this case - which was mixed (upholding corporate separateness but granting the Ecuadorians the right to a trial to challenge Chevron's completely unfounded allegations of fraud). Instead the Ecuadorians were forced to confront Chevron's demand that the communities come up with almost $1 million as a security fee for the appeal to proceed. This is yet another legal delay tactic from Chevron in their never ending hope that the people they harmed will either give up, run out of funds, or simply die off before they can force Chevron to pay up.

In 2014, the Supreme Court of Canada ruled unanimously that the Ecuadorians could seek enforcement of the $9.5 billion verdict in Canada. Chevron's Canadian subsidiary, Chevron-Canada, holds approximately $15 billion in assets and since Chevron famously fled Ecuador with its assets to avoid paying (and invented an elaborate lie about fraud and bribery so they could countersue in the U.S. to make enforcement there very difficult), the Ecuadorians have been forced to pursue Chevron to Canada like a fugitive deadbeat.

Try to wrap your mind around this: the third largest corporation in the U.S., after spending billions to drag out a cut-and-dry case of deliberate environmental contamination for decades, is now demanding the the Ecuadorian communities pay $1 million for the right to an appeal which could finally permit seizure of their assets to pay for a clean-up.

To quote The Dark Side of the Moon: "And if your head explodes with dark forebodings, too..." yeah, that's an appropriate reaction at this point.

The lead lawyer for the Ecuadorians, Alan Lenczner, pointed out quite clearly that this was nothing more than a stunt by Chevron, stating that, "Chevron is one of largest companies in the world with over 1,500 subsidiaries, $225 billion in annual revenue, which is $1 billion a day for each working day, with a profit of $25 billion annually, working out to $1 million per DAY is hardly in need of protection!" In fact, just counting Chevron and Chevron-Canada's legal team in the room this week, there were at least twenty lawyers and their staff. The cost for their travel and billing right there is more than the security fund itself! That alone proves this is nothing but a punitive legal subterfuge, to our eyes.

But the hearing this week also had a new element which has previously played only a minor role in the several years this case has dragged on in Canada. The introduction of Peter Grant, a renowned Canadian aboriginal rights lawyer who recently helped to win a major case before the country's Supreme Court, had a profound impact on the proceedings. Peter made it clear to the appellate panel of Justices Hoy, Cronk, and Hourigan that this entire exercise was fundamentally an issue of access to justice for indigenous peoples. Grant, who had recently visited the Ecuadorian Amazon to witness the contamination along with Canadian indigenous leaders Phil Fontaine and Ed John and Greenpeace co-founder Rex Weyler, spoke with firsthand experience of what effect this order would have on the people still suffering today. This has even more resonance considering that Canada recently signed the UN Declaration on the Rights of Indigenous Peoples and there is much more respect in Canadian political discourse for indigenous peoples.

And that's the genuine issue that not only the Canadian appeals court but Chevron and its lawyers should be made to face every single day. People are still dying from the deliberate contamination caused by Chevron in the Amazon. This is not an historic case about reparation for past harms, but a very real and urgent need for clean-up today. Every day Chevron evades paying for that clean-up, more people in the region risk sickness and death. It must end here. As Roger Waters said, "if Chevron can go on fighting this for another twenty years, and they will if they can, what does that say about us as a human race, that we would allow such a thing? It says that we've lost our grip on the reins of civilization."

Tuesday, August 29, 2017

After seven dreadful years, Chevron CEO John Watson recently made a surprise announcement that he is finally slinking off with his tail between his legs. Yet the world will continue to suffer from the disastrous effects of his terrible decisions for many years to come. Amazon Watch's history with Watson dates back to Chevron's merger with Texaco. John Watson was a principal architect of that merger, and at a Chevron shareholder meeting we presented him with a great deal of information about Texaco's environmental disaster in Ecuador and warned that if the merger went through then Chevron would necessarily assume all liability to clean up the worst oil-related disaster in history. Watson ignored us.

In 2010, Watson became CEO on the eve of the largest environmental judgment ever won against an oil company, in which Chevron was ordered to pay $9.5 billion to clean up Texaco's toxic mess. Chevron lost that trial after years of efforts to delay and derail it, and after thousands of pages of scientific evidence – much of which provided by Chevron's own experts – demonstrated the damage caused by Texaco's deliberate dumping and shoddy operations. At the time of that judgement, Watson had another chance to listen to the appeals of the people of Ecuador and finally do the right thing.

Not only did Watson refuse to take responsibility and clean up the toxic waste still poisoning these communities, but he focused the full weight of Chevron's legal and public relations might on demonizing the Ecuadorians and their lawyers, and he even countersued them, alleging extortion. The company is even seeking $32 million in legal fees in an attempt to personally bankrupt Steven Donziger, a key member of the legal team that achieved the historic judgment in Ecuador. We at Amazon Watch were pulled into Chevron's sham suit as an alleged "co-conspirator" for standing with the communities who sued to clean up their homes. It's estimated that, to date, Chevron has spent as much as $2 billion just to avoid cleaning up the toxic waste that Texaco admitted dumping in Ecuador.

Under Watson's misleadership, Chevron has distinguished itself as the worst U.S. oil company by eliminating its renewable energy program, closing its corporate social responsibility department, and attempting to influence politics by spending more on super-PACs than any other corporation immediately after the Citizens United decision.

In short, it would be hard for Chevron to do worse than Watson and we are thrilled to see him go. The company is still facing a collection action in Canada for its $9.5 billion debt to the people of Ecuador. A new CEO will have an opportunity to finally break with Chevron's abusive past and respect the rule of law and the environment.

Watson spent his time as CEO trying to make it harder for the environmental and human rights community to challenge corporate power, but we stand united and will continue to hold Chevron to account, no matter who is at the helm.

Wednesday, August 23, 2017

Burdened with a series of intractable problems, Chevron CEO John Watson announced this week that he is stepping down after seven years at the helm of America's second-largest energy company. He will be remembered far more for saddling Chevron with huge environmental liabilities than for delivering value to shareholders.

Watson's legacy is to leave Chevron with a bleak long-term prognosis. While the fossil fuel industry faces unprecedented structural pressures, Chevron is arguably in a worse position than its peers. Watson made a disastrous bet in Australia on the Gorgon natural gas project, a move that landed him in major trouble with tax authorities and saddled Chevron with at least $20 billion in cost overruns.

But let's focus on Watson's most obvious mistake, Ecuador.

Ecuador is the place where Watson literally has blood on his hands for failing to address the fallout from Texaco's deliberate dumping of billions of gallons of toxic waste into the rainforest when it operated six huge oil fields from 1964 to 1992. The dumping -- called the Amazon Chernobyl by locals -- decimated indigenous nationalities and continues to kill scores of innocent people as confirmed by multiple academic studies and various court rulings.

While Chevron left Ecuador in 1992, the company's toxic legacy -- including roughly 1,000 open-air toxic waste pits -- continues to cause grievous harm to the local population. Under Watson's recommendation, Chevron bought Texaco in 2001 and now owns the Ecuador problem.

A successful litigation brought by local communities to repair the damage has captured the imagination of the world. The legal battle led to a $9.5 billion judgment in Ecuador in the venue where Chevron accepted jurisdiction and where it had insisted the trial be held. Chevron could have settled the claims for a relative pittance years ago. But under Watson, the Ecuador liability has now ballooned to $12 billion (with interest) in Canada, where the villagers are enforcing their judgment.

Watson was the Chevron executive in charge of merging with Texaco back in 2001. At the time, environmental groups such as Amazon Watch warned him about the massive pending liability in Ecuador; he ignored the warnings, which perhaps explains why he doubled down and started attacking his victims and their lawyers. He also ordered a $2 million payment be made to a witness to lie in order to help the company cover-up its disastrous policy.

At the time Watson was director of Chevron's acquisitions, Chevron grossly overpaid for Texaco's assets given that there was no accounting for the Ecuador clean-up costs. But arrogance is Watson's hallmark personality trait.

Angry at being challenged by shareholders and activists, Watson and his General Counsel R. Hewitt Pate launched the most expensive corporate "defense" in history. They threatened the Ecuadorian villagers with a "lifetime of litigation" if they persisted. They had five shareholders arrested at an annual meeting after they challenged the company's Ecuador policy. Chevron's lawyers even fabricated evidence to secure a favorable "judgment" in a farcical non-jury trial in U.S. federal court, making a mockery of justice in the process.

A Chevron official wrote an email saying Watson's main litigation strategy was to "demonize" Steven Donziger, the tenacious Harvard-educated human rights lawyer who has led the fight against Chevron for years. Donziger personally deposed Watson in 2013 in New York. Although the pro-Chevron judge sealed the deposition -- a ridiculous and unnecessary move -- we can assert with certainty that Watson came across as an angry and petty man.

Watson even told Forbes he would stop the Ecuador litigation only when Donziger and the lawyers "give up" and quit the case. That's an intimidation strategy, not a litigation strategy worthy of a major public company that purports to behave ethically.

Watson tapped into shareholder resources to hire at least 2,000 lawyers and 60 law firms to try to beat back the courageous indigenous villagers -- another massive cost suck that suggests Gorgon was not Watson's only spending problem. In his latest maneuver, Watson has ordered his lawyers to illegally try to collect $32 million in legal fees from longtime nemesis Donziger.

Chevron's refinery in the California town of Richmond is another example of Watson's short-sightedness. Major fires at the refinery have spewed so much toxic waste that 15,000 local residents have been forced to receive medical attention. Rather than shut down or at least update the refinery, Watson tried to take over the town by financing a slate of candidates for city council while secretly funding an on-line newspaper to spew pro-Chevron propaganda.

Under Watson's leadership, Chevron has tried to buy its way out of its litigation problems by spending heavily in the political world rather than compensate the company's victims. Watson ordered Chevron to be a major donor to the Trump inauguration and other Koch-funded initiatives designed to increase corporate power. Watson also donated millions of Chevron dollars to the Clinton Foundation and the U.S. State Department during the Obama Administration at the same time his team was inappropriately lobbying to try to kill off the Ecuador liability.

Watson was willing to take extraordinary risks for the leader of a public company. His corrupt witness payments to Guerra and another Chevron employee, the infamous Diego Borja, continue to this day. With Watson's blessing, Chevron also spent at least $15 million on the corporate espionage firm Kroll to spy on Donziger and his colleagues and to try to enlist independent journalists to go undercover in Ecuador on the company's behalf.

Chevron's next CEO will need to clean up Watson's dastardly mess in Ecuador. Indigenous people are still dying in the Amazon because of the company's failure to address its toxic legacy. It's long past time for Chevron's Board to admit that Watson only has made matters worse both for the people of Ecuador and the company's own shareholders.

About This Blog

For over three decades, Chevron chose profit over people in the Ecuadorian Amazon. The cold and calculated decision to save $3 per barrel and yet poison entire communities is compounded daily as Chevron continues its PR campaign to suppress the truth and barrage the media with lies about its actions and responsibility. This blog is part of an ever-growing campaign to counter Chevron's misinformation tactics and speak frankly about their attempts to hide their role in the world's worst oil-related disaster.